An unexpected Texas company now files for bankruptcy citing issues with a natural gas project, affecting 20 of its subsidiaries.
Zachry Holdings, the San Antonio company that oversees the construction and engineering projects and built the Hilton Palacio del Rio, has filed for bankruptcy citing issues with a natural gas project.
The company and its 20 other subsidiaries voluntarily filed for Chapter 11 bankruptcy, according to documents filed in Texas bankruptcy court Tuesday and as first reported through the Express-News.
The petition identifies at least 30 debtors that have the largest unsecured claims against Zachry Holdings totaling $306,850,418.
The largest claim, $133 million, comes from Sunbelt Rentals Inc.
Mohsin Y. Meghji, chief restructuring officer for Zachry Holdings, said in a separate declaration also filed in court Tuesday that the “result of financial distress” is caused by a major liquified natural gas (LNG) project in Sabine Pass awarded to Zachry Industrial in 2019 by Golden Pass LNG Terminal LLC, an entity owned by an entity 100% owned by affiliates of Exxon Mobil Corporation and Qatar Energy.
“As the project’s lead contractor, we have navigated significant challenges and disruptions stemming first from the COVID-19 pandemic and, more recently, international geopolitical issues,” says John B. Zachry, chairman and CEO, in a news release.
“These unforeseen disruptions have resulted in significant financial strain while meeting targets and keeping the project appropriately staffed.”
Zachry says in the press release that he believes the company’s cash on hand and cash generated from other projects will provide enough liquidity to meet it’s obligations.
Zachry Holdings also created a website providing information on the court process.
The company says on its website that this will have minimal impact on its ongoing business and other clients.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
Another unexpected fashion company now files for bankruptcy citing “extremely high costs due to inflation”, and other troubles.
Fashion brand Esprit has filed for insolvency in Europe citing “extremely high costs due to inflation, interest rates and energy prices, the after-effects of the coronavirus pandemic and the consequences of international conflicts.”
The insolvency filing, which was submitted to a court in Germany, applies only to the company’s European businesses.
All stores and online operations will continue as normal throughout the proceedings, during which the company said it will undergo a “transformation program” to reorganize its finances and business in Europe.
However, the company did note that high rents and an “overly bloated workforce” were some of factors contributing to its financial woes, foreshadowing potential cuts in both areas.
Founded in the U.S. in 1968, the company is now headquartered in Germany and Hong Kong and is listed on the Hong Kong stock exchange.
This is the second time Esprit has entered bankruptcy in the past four years.
Esprit currently has a presence in 40 countries around the globe, with the company’s Asia-Pacific and North and South America divisions unaffected by the European proceedings.
Each group within Esprit’s European business will be tasked with proposing and executing its own restructuring plan tailored to its region “allowing for more creative solutions and potentially better outcomes,” said the company in a statement.
The group also said it is exploring new funding opportunities and that a number of “potential investors have expressed their interest for a strategic partnership.”
“The self-administration proceedings have been initiated with the primary objective of not only restoring the economic stability of the company but also retaining the strength of the Esprit brand name,” said the statement.
“By taking proactive steps to address the disproportionate operating costs and streamline the business, the company demonstrates its commitment to maintaining a strong and competitive brand presence in the market.”
This second European bankruptcy comes as the Esprit works to reestablish its presence in North America, an effort that kicked off last year with a series of pop-ups across the U.S.
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Also Read: This Massive Mall Retailer Is Now Closing In California
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